Networking giant Cisco Systems has announced its plans to snap up TV software firm NDS for a cool $5bn.

News of the takeover talks leaked out of Israel - where NDS was founded in 1988 and still has a large R&D facility earlier today - but Cisco has now confirmed the deal.

NDS, which provides software for the pay television industry, is now headquartered in London and is 51 per cent owned by Permira private equity fund and 49 per cent owned by Rupert Murdoch's News Corp since it delisted from the stock exchange in 2009.

At that time, the company was worth 35 per cent less than the $5bn offer to buy, according to Israeli financial newspaper Calcalist (with help from Google Translate).

In December last year, NDS again filed to go public, hoping to raise $100m in the process.

NDS has customers all over the world, including Sky and Canal in Europe and Comcast in the US. Its flagship product is an encryption and conditional access system called VideoGuard, which is a smart card in set-top boxes that controls the channels provided to pay TV subscribers.

Cisco said that acquiring NDS would add to its Videoscape product, a "comprehensive platform that enables service providers and media companies to deliver next-generation entertainment experiences".

The firm said that both its board and the board of directors of NDS had already approved the deal, which is expected to be completed in the second half of this year.

Cisco also said that all of NDS's global sites and its 5,000 or so employees would be joining the Cisco Service Provider Video Technology Group when the deal goes through. ®